Time and again, we see CEOs and similar executives make horrible decisions that massively damage a company both financially and in terms of reputation and the perpetrator is forced to resign, yet receives so much money as a going away present you’d think they’re being rewarded for their fuck up. Why??
To make them go away before doing more damage although their contract is still valid for some years. Same with a messie as tenant, you essentially bribe them to go before they damage the flat even more.
Not only that, but that parachute comes with… well… strings attached. (Sorry.)
Most CEOs have a high-level understanding of a companies long-term strategic plan, which would be very valuable to competitors. That payout is probably tied to an iron-clad NDA and non-compete clause. While non-compete clauses get a lot of bad press when peons are forced to sign them, for executives they make total sense, especially when directly tied to a payout, which can be clawed back if there is chicanery.
If an executive is bad enough, paying them to not work anywhere for a few years may be less risky than firing themand risking them blabbing to th3 competition.